Alternative Lending And Student Loans: Millennials, Take Note

The alternative lending universe is rampantly expanding, which is good news for Americans burdened by tens of thousands if not hundreds of thousands in debt.

For Millennials in particular, the debt crisis can be crippling. According toNew America data and the Consumer Financial Protection Bureau, the student debt situation comes in at an astronomical $1.2+ trillion, with the average bachelor’s-degree-holding college graduate carrying roughly $30,000 in student loan debt.

Not only are the numbers shocking, but the implications are downright depressing. Carrying around such substantial debt has led to a widespread trend ofdelaying major life events for the generation as a whole.

Furthermore,Forbes reported late last year that “30 percent of Millennials would sell an organ to get rid of student loans.”

“[A] new survey asked indebted adults this and other would-you-rather questions and found that a not-insignificant portion would forego their physical and psychological well being in exchange for their student debt balance wiped clean,” Forbes’ Maggie McGrath elaborated.

Paying Off The Debt

While utilizing alternative lending services to deplete overall debt comes with its own caveats, approached with the proper amount of financial literacy, alternative lending can be a prudent move to attack student loan debt.

The Wall Street Journal explained the broad concerns of using just any alternative financial services, “The use of alternative financial services, such as auto title loans, payday loans, pawnshops, rent-to-own loans and tax-refund advances, represents another significant source of short-term debt.”

However, not all alternative options are as risky as auto title loans or payday advance loans.

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It’s important to remember that alternative financing options are tools. In the wrong hands, without the proper expertise, they can be misused. However, with adequate education and a guiding hand, alternative lending can help many people dig themselves out of what may seem to be insurmountable debt.